Even with Circle of prayer showing a color, the ghosts of that color with power 1 ARE NOT automatically removed from the game.You still need to go to them and spend the action to exorcise them. It will be auto-success, but the action will be spent on that.(Of course, you can combine this auto-success in one action with a different ghost, when exorcising on a corner tile.)

I just bought the game and I want to make sure I understand this one given that you normally either ask for the village help of fight a ghost.

So say there is a red token on that village tile, all ghosts resistance are now reduced by one? Even though another monk is not on the village? So you only need to vist the village to either place a token or swap the colour?